The several sanctions imposed on Russia which include the suspension of Russian imports from several countries, opened a hole in the global supply chain that is slowly being filled whole by commodity-exporting countries, says the Bank of America (BofA). These changes in the global commercial landscape can lead us to a “new global commodity order.” The countries benefiting the most from the global supply imbalance are in Latin America, with Brazil being the market that saw the most gains from the situation. Latin America accounts for 55% of global crude soy oil exports, as well as 42% of global lead ore exports. In the case of Brazil, BofA believes that the country benefits from a confluence of factors: almost no exposure to Russia in terms of trade (except for fertilizers); high commodity prices leading to favorable trade deals; benchmark Selic base interest rate at its highest; substantial exposure to commodities (44% of the equity market).
Sources: Money Times/Datamar News